Why more women in leadership roles means better business

Caroline Donaldson, Jo Macsween and Petra Biberbach were speaking at the inaugural Women’s Leadership Lunch, the Institute of Directors (IoD) in September 2015.

Caroline Donaldson, IoD Scotland Diversity Lead One of the founding directors of executive coaching firm Kynesis, Caroline Donaldson is on the IoD Scotland Committee, SCDI Executive, CBI Council, The Two Percent Club steering group and boards of the Arches and Link Group.

Jo Macsween, Managing Director, Macsween Jo Macsween is the Managing Director of Macsween, a third generation family company first founded in the 1950s, and is the current IoD Scotland Female Director of the Year.

Petra Biberbach, Chief Executive, PAS Petra Biberbach is Chief Executive of national charity, Planning Aid for Scotland (PAS), a post she has held since June 2005. Her previous experience spans the public, private and third sector, in the fields of planning, sustainable development, renewable energy, and community engagement and action research.

The glass ceiling is arguably a thing of the past, but while more women than ever now serve on British boards, the proportion still falls far short of 50%1. However, research shows that having women in leadership roles could prove critical to organisations’ success.

Gender diversity isn’t a box-ticking exercise, it’s a corporate advantage. Research shows that companies that invest in this area are less likely to fall victim to corruption, fraud, and shareholder battles2.

“I think this is because women make decisions differently,” argues Caroline Donaldson, Diversity Lead for the Institute of Directors (IoD) in Scotland, speaking at the inaugural Women’s Leadership Lunch hosted by the IoD. “In their thinking and their strategy, women take a longer view of success and have less of an appetite for risk. Listening and engaging comes naturally to them. That might be a generalisation – not all women are good listeners and not all men are bad at engagement – but having a good mix on the board means decisions are likely to be more sound and more balanced.”

“Women tend to have a collegiate, collaborative leadership style,” agrees Petra Biberbach, Chief Executive of planning charity PAS, and a keynote speaker at the event. “They also focus on the long-term. To that end, both age balance and gender balance are crucial - that’s how you really optimise your longer term planning.”

Jo Macsween, Managing Director of renowned family-owned haggis producer Macsween, adds: “Diversity is essential. If everyone on a board is of the same mindset and generally agrees, the board is redundant – it’s not good governance because there’s no challenge.”

Driving results

Establishing gender balance doesn’t just improve corporate governance; it also enhances bottom line performance. “Research tells us that if you have greater diversity, you have higher returns and more innovation,” says Caroline. “Several studies, including ones by Sodexo, McKinsey & Co. and Catalyst, have shown a percentage improvement to the bottom line where businesses had women on their senior teams3.”

The reasons for this effect are varied, she believes: “Women at the top can bring fresh ideas to a business. For mid-size firms especially, access to finance can be tricky so they need to come up with ideas to pique the interest of investors, and an engaging story to take to the banks. Ideas are the lifeblood of businesses going forward – innovation is essential for survival.”

Jo shares a similar view: “The more diverse your board and your workforce, the better your business solutions – you’re more likely to explore all the opportunities and new, creative ways of doing things.”

On a more basic level, adds Caroline, a business needs to understand its customers – and the trends driving their behaviour – in order to thrive. “For a business to understand culture, society and its customers, it needs women at board level. After all, women make up half the population and we make 83% of consumer purchases4. Our purchasing power continues to increase – we’re the future of the economy.”

It seems only logical to consider the social context that businesses trade in, Petra notes: “To survive, a company needs to reflect its client base to truly understand it.”

“At a very simple level, your board needs to represent the citizens in your organisation and society at large,” Jo agrees. “Without women, young people, disabled people, gay people, you are not representing the community you aim to serve, nor your customer base.”

So whichever way you look at it, having gender diversity from the very top down makes good, solid business sense.

Top tips for aspiring business leaders

Realise you could be your own biggest barrier.“I’ve realised the main barriers are in my head. Being a leader is not about gender, but about self-confidence, clarity, communication skills and vision.” Jo Macsween.

Engage your right brain.“As leaders, we continually need to challenge the models that are out there. By engaging our creative sides more – our right brain thinking, we can encourage innovation.” Caroline Donaldson.

Make time for yourself.“Don’t just keep juggling – that’s counter-productive. You sometimes just need to down tools – sleep, rest, retreat and nurture your soul. I sometimes find the harder I work, the less effective I am. When I stop, solutions come to me.” Jo Macsween.

Stay curious.“Put your hand up - always volunteer. Muck in and get involved. This way you’ll keep learning from others.” Caroline Donaldson.

Be a people person.“How you get on in the world, whether you’re successful or not, depends on the relationships you build.” Jo Macsween.

Be true to yourself.“Stick to what you know is the right thing to do, even if that means being the lone voice. Leadership can be lonely. Have the courage to say what you really believe is true.” Jo Macsween.

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